The article reflects the main aspects that should be taken into account in developing and changing the regulation of intellectual property sphere. Being harmful in some aspects, piracy also has a number of properties that can be useful for copyright owners: information, network and indirect effects. The paper presents a mathematical model showing the case where the protection of intellection activity result can cause more damage to public welfare than piracy itself. The findings show a need for tools more flexible than the intellectual property system so that every copyright owner can choose the required level of protection.

The article analyses the main features of the intellectual activity results market through the lens of the product boundaries definition. Frequently the pirated copy is not considered as a substitute for original products in legal cases. However, unlicensed computer programs should be included in the product market boundaries regardless of its legal status if the consumer considers them as substitutes. The difference between these types of products (original and pirated) are hidden not in transformation but in transaction characteristics. It is also important to take into consideration the possible complementarity between pirated and original products expressed in the information and network effects. In order to assess the buyers’ choice it is necessary to adjust the methods evaluating product market boundaries prescribed by «The Procedure of market competition analysis» of the Russia’s Federal Antimonopoly Service.